- Kate Davies, Office for National Statistics
Retail sales in the UK surged much more than expected in September, fuelling optimism over the country's economic outlook and supporting the case for an interest rate hike. Total retail sales soared 1.9%, overshooting economists' expectations for a modest 0.4% gain and following the 0.4% decline a month earlier. At the same time, core measure, which excludes fuel, leapt 1.7% up from 0.7% in August, the Office for National Statistics reported. In annual terms, retail sales increased 6.5% in September, above expectations for a 4.8% rise, after climbing at a rate of 3.5% in August. The major contributor to the increase was a steep rise in food sales triggered by the August bank holiday, as well as a surge in beer sales during the Rugby World Cup. Food and drink sales rose by 2.3% on the month, the biggest gain since April 2014. However, the boost to spending from the four-yearly Rugby World Cup may wane in October, after England's early exit from the tournament.
Figures also showed retail sales volumes, which make up 5.7% of the total economic output, accelerated pace to 0.9% overall during the third quarter, with the ONS saying this increase should add approximately 0.1 of a percentage point to third-quarter economic growth.
© Dukascopy Bank SA